A radical shift in crypto debate

Proposed bill outlaws non-crackable crypto products, restrict imports

By Brock N. Meeks, MSNBC

WASHINGTON -- The White House would likely be very sympathetic to a controversial
new bill that would outlaw all encryption software that doesnt allow
law enforcement agencies to immediately decode scrambled messages, an
administration official told MSNBC.

The new bill, still in draft form, is quietly circulating among members of
the House and Senate. Although the administration hasnt formally endorsed
any provisions of the bill, MSNBC has learned that the White House has been
providing what is called technical drafting assistance to members of Congress
writing the bill. William Reinsch, the Commerce Department undersecretary
for export administration, confirmed the White House involvement for MSNBC
on Thursday night.

The draft bill was already in the hands of some members of the Senates
Subcommittee on Technology, Terrorism and Government Regulation when FBI
Director Louis Freeh outlined its basic provisions while testifying before
the panel Wednesday. Freeh said "we would recommend" that legislation be
written requiring all encryption software or services made in or imported
to the United States to have a feature "which would allow for the immediate,
lawful decryption" of any scrambled messages used for illegal purposes or
in a national security matter.

NATION AT RISK?

The White House, FBI and intelligence agencies claim that the proliferation
of unbreakable encryption products puts the nation at risk. Criminals and
terrorists are increasingly using unbreakable encryption products, Freeh
testified Wednesday.

U.S. makers of encryption software claim that any government-mandated decoding
features would make their products unacceptable to clients in the global
marketplace. The new proposals outlined by Freeh also drew the ire of civil
liberties groups, which fear that any government controls on encryption products
raise serious First Amendment and privacy concerns.

Placing such government-mandated controls on the domestic use and manufacture
of encryption software, as well as on the import of encryption products,
stands in marked contrast to current White House crypto policies. Currently,
the United States places strict regulations on the export of any encryption
products that do make decoding keys available to law enforcement agencies.
However, the administration has steadfastly maintained throughout the often
contentious public debate over encryption policies that it would not place
any restrictions on the domestic use of encryption software, nor would it
restrict the import of encryption products.

Despite Freehs testimony and the draft legislation written with White
House assistance, Reinsch said the administrations policy on encryption
hasnt changed. "I want to emphasize that [in providing drafting assistance]
we are responding to committee requests," he said. "And those requests have
been fairly directive, such as: Give us some examples of how we can
better accommodate law enforcement needs. "

Currently, the White House is backing an encryption bill in the Senate called
the Secure Public Networks Act, also known as S. 909. This bill would encourage
the use of and set up guidelines for encryption software products with decoding
keys. Under this plan, all coded messages would spin off a decoding key that
would be stored with a government-approved third party. Law enforcement agencies,
foreign or domestic, would be allowed access to those keys if they obtained
a court-ordered warrant. The bill would not restrict or require any encryption
software used in the United States, or restrict the import of any foreign
crypto products.

However, MSNBC has learned that the draft bill now circulating among members
of the House and Senate specifically outlaws the "manufacture, distribution
or import" of any encryption software product or communication device that
does not "allow the immediate decryption" of all scrambled messages or
communications "if used for illegal purposes." The bill also targets "network
services," such as Internet Service Providers, that provide encryption
capabilities to their clients.

BAN WOULD GO INTO EFFECT IN 1999

Under this proposed bill, if such encryption services are offered by a company
like ISP, the service provider must build in a provision to allow for immediate
decryption of any scrambled messages, according to several sources that have
seen the draft language. The software ban would go into effect in January
1999.

Reinsch told MSNBC he wasnt sure that Freehs testimony "accurately
reflected" the language the White House offered in its technical drafting
for congressional committees. However, he indicated the administration was
interested in Freehs proposal.

"Ill be blunt about it," Reinsch said. If such a bill were approved
by a congressional committee, the administration "would look very seriously
at it and I imagine we would be very sympathetic to it," he said.

Opponents of proposals to require key for all encryption software blanched
at Freehs statements. "This proposal crosses a line that hasnt
been crossed before in the area of domestic controls on crypto," said Alan
Davidson, policy analyst for the Center for Democracy and Technology. Davidson
said a government mandate to provide immediate decryption capabilities would
be like "forcing everyone to live in a glass house." It also "trashes the
Fourth Amendment," which guarantees a right to be protected from unlawful
search and seizure, Davidson said.

Freeh told the Senate panel Wednesday that he isnt looking to expand
law enforcements investigative powers. Rather, he said, he is only
looking for a "Fourth Amendment that works in the Information Age."